Federal Reserve Chair Kevin Warsh said the central bank would take its cues from the bond market. One bond manager says that plan backfired quickly.
Bond yields still look attractive, but investors are earning little extra for taking on corporate credit risk, according to Thornburg Investment Management. Key Takeaways: Investment-grade spreads reached their tightest point since 1998, while high-yield spreads matched pre-2007 levels.
Bonds slid in the third quarter as sticky inflation and heavy corporate borrowing pushed yields higher, Morningstar's Sarah Hansen reported Wednesday. Key Takeaways: Treasury yields climbed to levels last seen during the financial crisis after the Fed raised rates in September.
The U.S. Treasury yield curve's slope is more attractive now than it has been in over 15 years, according to Thornburg Investment Management. Key Takeaways: The Treasury yield curve has moved from inverted to its steepest slope in more than 15 years.
A 30-year U.S. Treasury yield near 5% is rare. It has appeared on only a handful of trading days over the past decade, according to Thornburg Investment Management.
Just over a year ago, the Thornburg Core Plus Bond ETF (TPLS) and the Thornburg Multi Sector Bond ETF (TMB) made their debut. The launches came in a year that saw a record number of active ETFs hit the market (almost 1,000, per Morningstar).
Fixed income investors have been basking in the sunlight of higher yields the past few years amid the Fed's aggressive rate-hiking cycle. Fast forward to now, with the Fed instituting its second rate cut of the year.
Given how uncharacteristically telegraphic the Federal Reserve has been with interest rate policy decisions as of late, it didn't surprise the markets that it cut the federal funds rate by 25 basis points for a second time in 2025.
The Fed instituted the first rate cut of the year and there are potentially more to come before 2025 turns into 2026. This puts fixed income investors on alert to ensure they properly position their portfolio for this shifting interest rate environment.
The U.S. Federal Reserve today implemented an interest rate cut of 25 basis points. The question remains: Just how aggressive will they be the rest of the year and beyond?